top of page

Exploring Alternative Antitrust Solutions for Google: A Focus on Conduct Remedies

Sri Madhura Srinivasa

[Sri Madhura is a student at Symbiosis Law School, Pune.]


On 21 November 2024, the United States Department of Justice (DOJ) proposed drastic measures, including the divestiture of Google Chrome, to address Google's monopolistic practices in search and its dominance in related markets.


The antitrust realm is marked by two approaches that primarily address competition concerns: 


  1. Structural remedies 

  2. Behavioural or conduct remedies


While these remedies diverge in methods and goals, the ultimate aim of both is to restore competition and protect consumer welfare


The breakup of monopolistic companies, such as in the United States of America et al. v. AT&T Inc. (AT&T), is a familiar example of a structural remedy involving permanent changes to the market structure divesting parts of the business. These remedies are seen as definitive solutions where the company’s size or market dominance is directly curtailed, thus enhancing competition.


However, these remedies are disruptive to business operations, involve significant legal complexities and could eliminate potential efficiencies that were otherwise expected from mergers or business consolidation. Conduct remedies, such as those employed in United States of America v. Microsoft Corporation (Microsoft), aim to foster competition through regulated business practices without requiring structural alterations. This article examines the potential of conduct remedies in addressing Google’s antitrust concerns and their viability as alternatives to structural breakups.


The Case Against Google


The DOJ's actions against Google raise potential concerns of applying structural remedies to address antitrust concerns, specifically through the forced sale of key assets like Chrome. Chrome, with its significant role in Google's ad and search business, has long been central to the company's market power. As the most widely used web browser globally, Chrome's value is intricately tied to Google's broader business model. However, forcing a sale of Chrome may not fully address the root competitive concerns, such as Google's search monopoly, because it fails to address the underlying market power in search that drives Google's business.


Structural Remedies


Proponents of divestitures believe that breaking up a dominant company will enable new competitors to emerge in the market, ultimately achieving a more competitive environment where multiple firms vie for consumer attention. Competition authorities worldwide generally order divestitures to enhance competition, leading to lower prices, improved quality, and greater innovation. Divestitures aim to curb the excessive market power of giants, stopping them from exploiting consumers or stifling rivals. At its heart is the goal of enhancing consumer welfare, with the added belief that smaller companies, created through such breakups, are less likely to misuse user data, offering improved privacy protections. Advocates for breaking up Big Tech, like Senator Elizabeth Warren and economist Robert Reich, believe divestitures are key to levelling the playing field and keeping markets competitive. Warren has called for the splitting up of tech giants like Google and Facebook to stop monopolistic behaviour, while Reich stresses the need to check their overwhelming power. Comparing these structural remedies to historic antitrust cases, such as the breaking up of Standard Oil in Standard Oil Co. of New Jersey v. United States, proponents argue that such measures can spark competition, reduce prices, improve services, and safeguard consumer privacy.


Behavioural economics explains why breaking up Big Tech companies might not lead to more competition. The concept of bounded rationality shows that users often stick to familiar platforms because they are limited by the information they have and the mental effort required to explore other options. Several factors reinforce this behaviour: loss aversion makes users hesitant to switch since the pain of changing outweighs the potential benefits; default bias means people tend to stay with what is easiest and most familiar; and network effects increase a platform's value as more people use it, further discouraging users from leaving. The Australian Competition and Consumer Commission’s Digital Platforms Inquiry-Final Report and the Chicago Digital Competition Report suggest that brand loyalty keeps users tied to dominant platforms, even when alternatives offer better value. Consumers often prefer branded goods over unbranded ones, assuming that branded products offer superior quality. This reliance on brand recognition can keep consumers loyal to the same dominant platforms, even when better alternatives are available. If Facebook and Instagram were separated, users might gravitate toward one platform over another, mistakenly perceiving it as superior. This herd behaviour could result in one platform gaining exclusive market power while the other struggles or exits the market.


Despite the potential for competition, users’ behavioural biases and the herd effect could hinder it, ultimately reinforcing the dominance of one platform even after the breakup. Additionally, herd behaviour, where people follow the crowd rather than make independent choices, contributes to market dominance. The herd effect happens when people follow what others are doing, even if it’s not the best choice. Two restaurants, A and B, serve food of the same quality. If some people mistakenly believe that restaurant B is better and start dining there, others may notice the crowd and assume that B is the superior choice. As more people follow suit without considering restaurant A, B becomes more popular over time, even though both are equally good. These patterns suggest that users are unlikely to switch platforms even after a breakup, so the competitive landscape would remain largely the same. Heuristics are mental shortcuts that help people make quick decisions, and users often stick with platforms like Google simply because they are easy to use and well-known. Additionally, studies reveal that users do not always choose the best-quality platforms available, further dampening the chances of increased competition in digital markets. This means that even after a breakup, a single platform will likely continue dominating digital markets. To illustrate, if Google is required to separate its advertising business from its search engine platform, advertisers will likely continue bidding for AdWords on Google Search. This is because Google’s search engine dominates the market and is deeply ingrained in user behaviour, attracting billions of users daily. Advertisers will still seek to reach this massive audience, regardless of whether the advertising business remains under the same corporate umbrella as the search engine. This loyalty demonstrates the strong network effects and entrenched brand loyalty Google enjoys, making it challenging for competitors to disrupt its dominance, even after structural changes. This phenomenon is particularly evident when an established brand name is retained. For example, if the separated platform continues to use the name "Google", users may continue to believe it's the best search engine due to the brand's reputation, leading them to choose it over other alternatives.       


Regulatory and Conduct Remedies


Conduct remedies are actions taken by regulatory authorities to mitigate the potential anti-competitive effects of a merger or acquisition without requiring structural changes, such as divestitures. These remedies usually involve specific commitments from the merging companies to avoid practices that could harm competition or consumer welfare.


In the case of the XM-Sirius merger, the conduct remedies included promises to maintain certain pricing levels, offer à-la-carte programming, and limit the amount of advertising on their platforms. However, such remedies are often considered less effective than structural ones because they are harder to monitor and enforce and may not fully address the root competitive issues.


The DOJ typically favours structural remedies over conduct remedies, as structural measures are seen as more direct and reliable in preventing anti-competitive outcomes. This can be evidenced through the Department of Justice (DOJ) Guidelines which strongly encourage structural remedies like divestitures over conduct remedies. 


Regulatory Approaches and Case Studies of Successful Conduct Remedies


Rather than resorting to company breakups, regulators can opt for conduct remedies, which push companies to modify their practices to foster fair competition. These remedies may include measures such as banning anti-competitive behaviours, ensuring greater transparency in algorithms, or mandating that companies give equal access to their platforms for competitors. By focusing on changing how companies operate, these remedies aim to level the playing field without requiring drastic structural changes. In the Google Search (Shopping) case, the European Commission opted not to break up the company but instead imposed fines and required Google to modify certain practices, such as ensuring equal treatment of competing services in search results. These measures contributed to increased competition in the online advertising market.


Competition authorities can implement regulations that push companies to be more transparent about how they handle data, use algorithms, and structure their business models. This increased transparency helps consumers make better-informed decisions and reduces the advantage dominant companies often have due to information imbalances. In the Microsoft case, the DOJ chose to settle with Microsoft, imposing measures that required the company to share its application programming interfaces with third-party developers and be more transparent in its business practices. This move helped open the software market and encourage competition, particularly in web browsers.


Ensuring that different platforms can work together seamlessly can foster competition. By requiring companies to allow interoperability, users can benefit from the best features of multiple platforms without being forced to choose one over another. In the telecommunications industry, the US Federal Communications Commission (FCC) made it easier for customers to switch carriers and keep their phone numbers. This increased competition and gave consumers more choices. Data portability, such as the General Data Protection Regulation (GDPR) in the EU, has also encouraged competition by allowing users to transfer their data between services, breaking down the barriers that keep users locked into one platform.


Conclusion


In the ongoing antitrust case against Google, the DOJ should explore conduct remedies to encourage fair competition without resorting to drastic measures that may not effectively prevent monopolistic practices. Google could enhance search algorithm transparency to eliminate biases favoring its services and ensure fair display of rival products. Making APIs more accessible would foster innovation and competition, while sharing anonymized user data at a reasonable cost could reduce its data advantage. Additionally, enabling easier data transfers would break the lock-in effect, promoting competition. Following Microsoft and AT&T precedents, Google could separate its advertising technology from search and mobile businesses to ensure fair market competition. These measures would allow smaller competitors to participate without dismantling Google’s integrated ecosystem entirely.


On the one hand, we have the success of AT&T’s divestiture, which demonstrated the effectiveness of breaking up a monopoly. On the other hand, Microsoft’s settlement provided a viable alternative that achieved positive results without resorting to a full breakup. Given Big Tech companies’ nature and vast influence, a balanced approach that combines regulatory and conduct remedies may be the most effective solution to foster fair competition. This strategy can address the issues without resorting to drastic measures that may not achieve the desired outcomes.


Sundar Pichai stated that Google’s dominant position stems from its status as the “industry's highest quality search engine”. The August 2024 court ruling in United States of America v. Google LLC acknowledged Google’s superior search engine, but imposed restrictions on its availability.


Behavioural economics explains why users tend to stick with default options, primarily due to their convenience. Even if Google were compelled to sell Chrome or separate its business operations, the resulting power would likely shift to the acquiring entity rather than fostering genuine competition. Therefore, breaking up Google may not address the underlying issue and could inadvertently reinforce the dominance of another major player. Ultimately, dismantling Google may not yield the intended solution.

87 views

Related Posts

See All

Comments


Sign up to receive updates on our latest posts.

Thank you for subscribing to IRCCL!

©2025 by The Indian Review of Corporate and Commercial Laws.

bottom of page